CBIZ, Inc. 10-Q

Item 1. Financial Statements CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 39,817 $ 13,826 Restricted cash 49,145 38,661 Accounts receivable, net 676,054 534,858 Other current assets 82,142 72,528 Current assets before funds held for clients 847,158 659,873 Funds held for clients 118,877 175,853 Total current assets 966,035 835,726 Non-current assets: Property and equipment, net 88,535 88,163 Goodwill and other intangible assets, net 2,899,958 2,945,470 Assets of deferred compensation plan 177,150 167,170 Right-of-use assets, net 367,476 393,512 Other non-current assets 38,819 40,842 Total non-current assets 3,571,938 3,635,157 Total assets $ 4,537,973 $ 4,470,883 LIABILITIES Current liabilities: Accounts payable $ 119,339 $ 90,646 Income taxes payable 23,892 — Accrued personnel costs 106,612 172,759 Contingent purchase price liabilities 37,325 61,164 Lease liabilities 62,187 60,549 Short-term debt (1) 66,274 66,177 Other current liabilities 67,987 78,579 Current liabilities before client fund obligations 483,616 529,874 Client fund obligations 118,705 175,928 Total current liabilities 602,321 705,802 Non-current liabilities: Long-term debt (1) 1,488,215 1,333,755 Income taxes payable 2,595 2,193 Deferred income taxes, net 13,154 10,880 Deferred compensation plan obligations 177,150 167,170 Contingent purchase price liabilities 11,408 35,803 Lease liabilities 345,635 372,586 Other non-current liabilities 5,652 62,711 Total non-current liabilities 2,043,809 1,985,098 Total liabilities 2,646,130 2,690,900 STOCKHOLDERS' EQUITY Common stock 1,429 1,380 Additional paid in capital 1,821,388 1,791,863 Retained earnings 1,060,837 896,122 Treasury stock ( 989,680 ) ( 910,601 ) Accumulated other comprehensive (loss) income ( 2,131 ) 1,219 Total stockholders’ equity 1,891,843 1,779,983 Total liabilities and stockholders’ equity $ 4,537,973 $ 4,470,883 See the accompanying notes to the unaudited condensed consolidated financial statements (1) Reflects the net debt for the Term Loan and Revolving Credit Facility with the associated debt issuance costs in short-term and long-term liabilities. See Note 5. Debt and Financing Arrangements for further discussion of the short-term and long-term debt. 3 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $ 683,496 $ 420,012 $ 1,521,510 $ 914,309 Operating expenses 595,587 366,368 1,205,499 742,853 Gross margin 87,909 53,644 316,011 171,456 Corporate general and administrative expenses 27,637 22,050 55,707 40,761 Operating income 60,272 31,594 260,304 130,695 Other (expense) income: Interest expense ( 27,867 ) ( 5,884 ) ( 53,023 ) ( 10,395 ) Other income, net 25,374 2,483 23,408 11,907 Total other (expense) income, net ( 2,493 ) ( 3,401 ) ( 29,615 ) 1,512 Income before income tax expense 57,779 28,193 230,689 132,207 Income tax expense 15,837 8,400 65,974 35,530 Net Income $ 41,942 $ 19,793 164,715 96,677 Earnings per share: Basic $ 0.66 $ 0.39 $ 2.59 $ 1.93 Diluted $ 0.66 $ 0.39 $ 2.58 $ 1.92 Basic weighted average shares outstanding 63,542 50,111 63,692 50,079 Diluted weighted average shares outstanding 63,784 50,276 63,960 50,248 Comprehensive income: Net income $ 41,942 $ 19,793 $ 164,715 $ 96,677 Other comprehensive (loss) income, net of tax ( 2,115 ) ( 142 ) ( 3,350 ) 876 Comprehensive income $ 39,827 $ 19,651 $ 161,365 $ 97,553 See the accompanying notes to the unaudited condensed consolidated financial statements 4 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands) Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total March 31, 2025 141,924 87,835 $ 1,420 $ 1,812,729 $ 1,018,895 $ ( 918,327 ) $ ( 16 ) $ 1,914,701 Net income — — — — 41,942 — — 41,942 Other comprehensive loss, net of tax — — — — — — ( 2,115 ) ( 2,115 ) Share repurchases — 991 — — — ( 71,321 ) — ( 71,321 ) Indirect repurchase of shares for minimum tax withholding — 1 — — — ( 32 ) — ( 32 ) Restricted stock units and awards 21 — — — — — — — Stock-based compensation — — — 6,600 — — — 6,600 Business acquisitions 906 — 9 2,059 — — — 2,068 June 30, 2025 142,851 88,827 $ 1,429 $ 1,821,388 $ 1,060,837 $ ( 989,680 ) $ ( 2,131 ) $ 1,891,843 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total March 31, 2024 137,855 87,743 $ 1,379 $ 841,268 $ 931,968 $ ( 910,322 ) $ 2,796 $ 867,089 Net income — — — — 19,793 — — 19,793 Other comprehensive loss, net of tax — — — — — — ( 142 ) ( 142 ) Restricted stock units and awards 16 — — — — — — — Stock-based compensation — — — 2,378 — — — 2,378 Business acquisitions 34 — — 2,316 — — — 2,316 June 30, 2024 137,905 87,743 $ 1,379 $ 845,962 $ 951,761 $ ( 910,322 ) $ 2,654 $ 891,434 See the accompanying notes to the unaudited condensed consolidated financial statements 5 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total December 31, 2024 137,945 87,747 1,380 1,791,863 896,122 ( 910,601 ) 1,219 1,779,983 Net income — — — — 164,715 — — 164,715 Other comprehensive loss, net of tax — — — — — — ( 3,350 ) ( 3,350 ) Share repurchases — 991 — — — ( 71,321 ) — ( 71,321 ) Indirect repurchase of shares for minimum tax withholding — 89 — — — ( 7,758 ) — ( 7,758 ) Restricted stock units and awards 99 — 1 ( 1 ) — — — — Performance share units 124 — 1 ( 1 ) — — — — Stock-based compensation — — — 12,239 — — — 12,239 Business acquisitions 4,683 — 47 17,288 — — — 17,335 June 30, 2025 142,851 88,827 $ 1,429 $ 1,821,388 $ 1,060,837 $ ( 989,680 ) $ ( 2,131 ) $ 1,891,843 Issued Common Shares Treasury Shares Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total December 31, 2023 137,387 87,573 $ 1,374 $ 832,475 $ 855,084 $ ( 899,093 ) $ 1,778 $ 791,618 Net income — — — — 96,677 — — 96,677 Other comprehensive income, net of tax — — — — — — 876 876 Indirect repurchase of shares for minimum tax withholding — 170 — — — ( 11,229 ) — ( 11,229 ) Restricted stock units and awards 118 — 1 ( 1 ) — — — — Performance share units 273 — 3 ( 3 ) — — — — Stock-based compensation — — — 5,016 — — — 5,016 Business acquisitions 127 — 1 8,475 — — — 8,476 June 30, 2024 137,905 87,743 $ 1,379 $ 845,962 $ 951,761 $ ( 910,322 ) $ 2,654 $ 891,434 See the accompanying notes to the unaudited condensed consolidated financial statements 6 CBIZ, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Six Months Ended June 30, 2025 2024 Cash flows from operating activities: Net income $ 164,715 $ 96,677 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization expense 49,858 19,008 Bad debt expense, net of recoveries 1,862 1,244 Adjustment to contingent purchase price liabilities 1,487 638 Stock-based compensation expense 12,239 5,016 Deferred income taxes 17,148 3,128 Other, net 2,683 273 Changes in assets and liabilities, net of acquisitions and divestitures: Accounts receivable, net ( 143,107 ) ( 95,997 ) Other assets ( 12,459 ) ( 1,663 ) Accounts payable 28,848 25,058 Income taxes payable 28,119 5,443 Accrued personnel costs ( 75,561 ) ( 38,502 ) Other liabilities ( 50,952 ) 4,116 Net cash provided by operating activities 24,880 24,439 Cash flows from investing activities: Business acquisitions and purchases of client lists, net of cash acquired — ( 22,493 ) Purchases of client fund investments ( 19,350 ) ( 12,100 ) Proceeds from the sales and maturities of client fund investments 21,645 12,421 Proceeds from sales of divested operations 289 — Change in funds held for clients ( 2,285 ) ( 301 ) Additions to property and equipment ( 13,125 ) ( 6,973 ) Other, net 527 ( 3,801 ) Net cash used in investing activities ( 12,299 ) ( 33,247 ) Cash flows from financing activities: Proceeds from bank debt 849,600 619,800 Payment of bank debt ( 696,800 ) ( 551,200 ) Deferred financing costs ( 983 ) — Payment for acquisition of treasury stock ( 71,321 ) — Indirect repurchase of shares for minimum tax withholding ( 7,758 ) ( 11,229 ) Changes in client funds obligations ( 57,223 ) ( 28,270 ) Payment of contingent consideration for acquisitions and client lists ( 48,764 ) ( 41,021 ) Net cash used in financing activities ( 33,249 ) ( 11,920 ) Net decrease in cash, cash equivalents and restricted cash ( 20,668 ) ( 20,728 ) Cash, cash equivalents and restricted cash at beginning of year $ 187,170 $ 157,148 Cash, cash equivalents and restricted cash at end of period $ 166,502 $ 136,420 Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets: Cash and cash equivalents $ 39,817 $ 1,128 Restricted cash 49,145 44,947 Cash equivalents included in funds held for clients 77,540 90,345 Total cash, cash equivalents and restricted cash $ 166,502 $ 136,420 See the accompanying notes to the unaudited condensed consolidated financial statements 7 CBIZ, INC. AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Selected Terms Used in Notes to the Condensed Consolidated Financial Statements ASA – Administrative Service Agreement ASC – Accounting Standards Codification ASU – Accounting Standards Update CPA firm – Certified Public Accounting firm FASB – The Financial Accounting Standards Board GAAP – United States Generally Accepted Accounting Principles SOFR – Secured Overnight Financing Rate SEC – United States Securities and Exchange Commission Marcum Acquisition - the Transaction Description of Business: CBIZ, Inc., together with all of its wholly-owned subsidiaries ("CBIZ", the "Company", "we", "us", or "our"), is a diversified services company which, acting through its subsidiaries, has been providing professional business services since 1996, primarily to small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises throughout the United States and parts of Canada. CBIZ manages and reports its operations along three practice groups: Financial Services, Benefits and Insurance Services and National Practices. A further description of products and services offered by each of the practice groups is provided in Note 13, Segment Disclosures. In December of 2024, the Company formed CBIZ CC, LLC and CBIZ Campus One Cell, LLC (collectively “Captive Insurance Company”). CBIZ CC, LLC, a sponsored captive core, is not expected to have any underwriting activities. CBIZ Campus One Cell, LLC, a sponsored captive cell, provides stop-loss coverages to a group of higher education institutions who self-insure their medical and prescription drug benefits. The term of the insurance policy is one year, and the insured is billed at the beginning of each month for that month’s coverage. Registered in the State of Vermont, the Captive Insurance Company commenced operation on January 1, 2025. The Captive Insurance Company recognizes premium as revenue monthly as monthly coverage expires. For the three and six months ended June 30, 2025, revenue from the Captive Insurance Company was not material. Basis of Consolidation: The accompanying unaudited condensed consolidated financial statements include the operations of CBIZ, Inc. and all of its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. We have determined that our relationship with certain CPA firms with which we maintain ASAs qualify as variable interest entities ("VIEs"), and we are the primary beneficiary of such VIEs. The accompanying unaudited condensed consolidated financial statements do not reflect the operations or accounts of the VIEs as the impact is not material to the financial condition, results of operations, or cash flows of CBIZ. Unaudited Interim Financial Statements: The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of CBIZ management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2025. 8 Use of Estimates: The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Changes in circumstances could cause actual results to differ materially from these estimates. Changes in Accounting Policies: We have consistently applied the accounting policies for the periods presented as described in Note 1, Basis of Presentation and Significant Accounting Policies, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024. Certain prior period amounts have been reclassified to conform to current year presentation. NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements - The FASB ASC is the sole source of authoritative GAAP other than the SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an ASU to communicate changes to the FASB codification. We assess and review the impact of all ASUs. ASUs not listed below were reviewed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements. Accounting Standards Issued But Not Yet Adopted - In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity's effective tax rate reconciliation as well as information on income tax paid. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2024. We plan to adopt the guidance for the fiscal year ending December 31, 2025. We are currently evaluating the effect adoption of this ASU will have on our consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2026, and interim periods within the annual period beginning after December 15, 2027. We plan to adopt the guidance for the fiscal year ending December 31, 2027. We are currently evaluating the effect of adopting this ASU will have on our consolidated financial statements. In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (VIE). This standard clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business. The guidance in this ASU is effective for public companies with annual periods beginning after December 15, 2026, and interim periods within those fiscal years. We plan to adopt the guidance for the fiscal year ending December 31, 2027. We are currently evaluating the effect of adopting this ASU will have on our consolidated financial statements. NOTE 3. BUSINESS COMBINATIONS Acquisition of Marcum LLP On November 1, 2024, the Company completed the acquisition of Marcum LLP (“Marcum”). The acquisition is referred to herein as the “Transaction”. During the six months ended June 30, 2025, the Company’s condensed consolidated statement of comprehensive income included $ 579.6 million of revenue and $ 119.1 million of operating income associated with the results of operations of Marcum. Stock Consideration Transferred At closing, the purchase price for the purpose of the Transaction consisted of an aggregate of $ 1,063.0 million of cash consideration and $ 934.7 million of the Company’s common stock, which represents a fair value of 13.6 million shares issued as stock consideration. Pursuant to the terms of the Transaction, with respect to the 13.6 million shares of stock consideration, approximately 4.9 million shares, in 9 aggregate, were delivered from January 2, 2025 to July 1, 2025 to the selling shareholders. The remaining 8.7 million shares will be delivered in 29 monthly installments starting on August 1, 2025. Measurement Period Adjustments The Company applied the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). During the six months ended June 30, 2025, the Company reassessed its estimates and inputs as new information about facts and circumstances that existed as of the acquisition date became known. As a result, the Company recorded a $ 23.0 million reduction in goodwill as a measurement period adjustment. The reduction to goodwill consists of a $ 21.0 million adjustment reflecting a reduction of the estimated settlement amounts associated with an acquired liability from $ 61.0 million to $ 40.0 million and a $ 2.0 million net increase in assets acquired. In the process, the Company also recorded a $ 8.7 million increase to goodwill as a result of recording an assumed liability associated with certain accrued personnel obligations previously unrecognized on the provisional opening balance sheet. The income statement impact, had those adjustments been made as of the acquisition date, was considered immaterial. The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Marcum, with the excess recorded as goodwill (in thousands): On November 1, 2024 Fair Value Total consideration transferred $ 1,997,781 Asset acquired: Account receivable 169,391 Unbilled revenue 23,247 Other current assets 25,898 Property and equipment 31,221 Other intangible assets 490,000 Right-of- use asset 166,840 Deferred income taxes, net 3,533 Total identifiable asset acquired 910,130 Liabilities assumed: Account payable 25,384 Accrued personnel costs 54,064 Other current liabilities 67,156 Contingent purchase price assumed (current and non-current) 24,947 Lease liabilities (current and non-current) 174,256 Other non-current liabilities 1,295 Total liabilities assumed 347,102 Net asset acquired 563,028 Goodwill $ 1,434,753 The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation. The above fair value of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information, such as final working capital adjustments, becomes available but no later than one year from the acquisition date. 10 Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion of the Transaction. NOTE 4. ACCOUNTS RECEIVABLE, NET Accounts receivable, less allowance for doubtful accounts, reflects the net realizable value of receivables and approximates fair value. Unbilled revenue is recorded at estimated net realizable value. Assessing the collectability of the receivables (billed and unbilled) requires management judgment based on a combination of factors, including but not limited to, an evaluation of our historical incurred loss experience, credit-worthiness of our clients, age of the trade receivable balance, current economic conditions that may affect a client’s ability to pay, and reasonable and supportable forecasts. Receivables are charged-off against the allowance when the balance is deemed uncollectible. Accounts receivable, net, at June 30, 2025 and December 31, 2024 was as follows (in thousands): June 30, 2025 December 31, 2024 Trade accounts receivable $ 502,115 $ 416,211 Unbilled revenue, at net realizable value 223,856 150,362 Total accounts receivable 725,971 566,573 Allowance for doubtful accounts ( 49,917 ) ( 31,715 ) Accounts receivable, net $ 676,054 $ 534,858 Changes to the allowance for doubtful accounts for the six months ended June 30, 2025 and year ended December 31, 2024 were as follows (in thousands): June 30, 2025 December 31, 2024 Balance at beginning of period $ ( 31,715 ) $ ( 25,598 ) Provision ( 19,323 ) ( 19,979 ) Charge-offs, net of recoveries 1,121 13,862 Allowance for doubtful accounts $ ( 49,917 ) $ ( 31,715 ) NOTE 5. DEBT AND FINANCING ARRANGEMENTS 2024 Credit Facilities - Our primary debt financing arrangement is the Amended and Restated Credit Agreement, dated as of November 1, 2024, as amended by the First Amendment, dated as of March 7, 2025, by and among the Company, CBIZ, Inc. as the borrower, the lenders party thereto from time to time and Bank of America, N.A., as the agent, which provides $ 2.0 billion in senior secured credit facilities, consisting of term loans with an original principle amount of $ 1.4 billion (the “Term Loan”) and a $ 600.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan, as may be further amended, restated, supplemented or otherwise modified from time to time, the "2024 Credit Facilities"). On April 29, 2025, the Company entered into a Second Amendment (the "Debt Amendment") to the 2024 Credit Facilities. The Debt Amendment added a usual and customary "Available Amount" basket available for making of certain investments and/or restricted payments (including share repurchases) from time to time subject to the satisfaction of certain terms and conditions set forth therein and made certain other technical changes. The changes from the Debt Amendment have been accounted for as a modification under ASC 470, Debt ("ASC 470") and had an immaterial impact to the financial statements. Th e 2024 Credit Facilities mature on November 1, 2029. The Term Loan provides for scheduled annual principal amortization payments of 5 % in the first two years following closing, 7.5 % annually in the third and fourth year following closing and 10 % in the fifth year following closing, with the balance due at maturity. The 2024 Credit Facilities contains certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens or other encumbrances, making certain payments, investments, or to sell or otherwise dispose of a substantial portion of assets, or to merge or consolidate 11 with an unaffiliated entity. The 2024 Credit Facilities also limit our ability to make dividend payments. Historically, we have not paid cash dividends on our common stock. Our Board of Directors has discretion over the payment and level of dividends on our common stock, subject to the limitations of the 2024 Credit Facilities and applicable law. The 2024 Credit Facilities contain a provision that, in the event of a defined change in control, the 2024 Credit Facilities may be terminated. In addition, the 2024 Credit Facilities includes a financial covenant requiring that Total Net Leverage Ratio not exceed 5.00 to 1.00 initially, stepping down in increments to 3.75 to 1.00 during and after the seventh fiscal quarter after the closing (with a limited ability to temporarily increase in connection with material acquisitions commencing in the sixth fiscal quarter after the closing). The 2024 Credit Facilities also require a Minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 and affirmative and negative covenants that are in each case generally similar to those contained in our previous amended and stated 2022 credit facility, but with increases to certain baskets and caps and certain other exceptions. As of June 30, 2025 , we were in compliance with all covenants. The balance outstanding under the 2024 Credit Facilities at June 30, 2025 and December 31, 2024 was as follows (in thousands): June 30, 2025 December 31, 2024 Short-term debt Current portion Term Loan $ 70,000 $ 70,000 Current portion debt issuance costs, Term Loan ( 3,726 ) ( 3,823 ) Total short-term debt $ 66,274 $ 66,177 Long-term debt Revolver Facility $ 208,700 $ 20,900 Debt issuance costs, Revolver ( 7,342 ) ( 7,160 ) Long Term Portion Term Loan 1,295,000 1,330,000 Long Term Portion Debt Issuance Costs, Term Loan ( 8,143 ) ( 9,985 ) Total long-term debt $ 1,488,215 $ 1,333,755 The blended effective interest rates under the 2024 Credit Facilities and the 2022 Credit Facility, including the impact of interest rate swaps associated with those credit facilities, for the six months ended June 30, 2025 and 2024 were as follows: Six Months Ended June 30, 2025 2024 Weighted average rates 6.67 % 5.41 % Range of effective rates 3.18 % - 8.75 % 1.93 % - 6.83 % We had approximately $ 370 million of available funds under the 2024 Credit Facilities at June 30, 2025, based on the terms of the commitment. Available funds under the 2024 Credit Facilities are based on a multiple of earnings before interest, taxes, depreciation and amortization as defined in the 2024 Credit Facilities, and are reduced by letters of credit, other indebtedness and outstanding borrowings under the 2024 Credit Facilities. Under the 2024 Credit Facilities, loans are charged an interest rate consisting of a base rate or term SOFR rate plus an applicable margin, letters of credit are charged based on the same applicable margin, and a commitment fee is charged on the unused portion of the 2024 Credit Facilities. Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the 2024 Credit Facilities and the 2022 credit facility. Other Line of Credit - We have an unsecured $ 20.0 million line of credit by and among CBIZ Benefits and Insurance, Inc. and Huntington National Bank ("line of credit"). We utilize this line of credit to support our short-term funding requirements of payroll client fund obligations due to the investment of client funds, rather than liquidating client funds that have already been invested in available-for-sale 12 securities. The line of credit did no t have a balance outstanding at June 30, 2025 or December 31, 2024. The line of credit was renewed in July 2025 and will now terminate on July 30, 2026. Interest Expense - Interest expense, including amortization of deferred financing costs, commitment fees, line of credit fees, and other applicable bank charges, for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Credit facilities $ 27,862 $ 5,881 $ 53,018 $ 10,392 Other 5 3 5 3 Total $ 27,867 $ 5,884 $ 53,023 $ 10,395 NOTE 6. COMMITMENTS AND CONTINGENCIES Letters of Credit and Guarantees - We provide letters of credit to landlords (lessors) of our leased premises in lieu of cash security deposits, which totaled $ 3.2 million and $ 3.2 million at June 30, 2025 and December 31, 2024, respectively. In addition, we provide license bonds to various state agencies to meet certain licensing requirements. The amount of license bonds outstanding was $ 2.2 million and $ 2.2 million at June 30, 2025 and December 31, 2024, respectively. Legal Proceedings - On December 19, 2016, CBIZ Operations, Inc. ("CBIZ Operations") was named as a defendant in a lawsuit filed by Zotec Partners, LLC (“Zotec”) in the Marion County Indiana Superior Court. After various amendments, the lawsuit asserted claims under Indiana law for securities, statutory and common law fraud or deception, unjust enrichment, breach of contract, and vicarious liability against CBIZ Operations and a former employee of CBIZ MMP in connection with the sale of the CBIZ MMP medical billing practice to Zotec. The plaintiff claimed that CBIZ Operations had a duty to disclose the fact, unknown to employees of CBIZ Operations at the time of the transaction, that the former employee of CBIZ MMP had a financial arrangement with a Zotec vendor at the time CBIZ Operations sold CBIZ MMP to Zotec. The plaintiff sought damages of up to $ 177.0 million out of the $ 200.0 million transaction price. Trial was held in October 2021. The jury found in favor of CBIZ on all fraud, contract and other claims before it. On November 14, 2022, the trial court ruled in favor of CBIZ and against Zotec’s claim for statutory securities fraud. The court also ruled in favor of CBIZ on its counterclaim for indemnification under contract. The trial court conducted a hearing on December 12, 2023, to consider evidence regarding the amount of damages owed by Zotec to CBIZ on the counterclaim. On March 12, 2024, the court awarded CBIZ $ 3.1 million on its counterclaim. On April 10, 2024, Zotec filed a notice of appeal. On April 8, 2025, the Court of Appeals affirmed the trial court's dismissal of the securities fraud claim against CBIZ. The Court of Appeals reversed the award to CBIZ on its counterclaim. Both CBIZ and Zotec opted against appealing this decision, rendering the decision final. On November 10, 2023, CBIZ was named as a defendant in a putative class action lawsuit in the United States District Court for the District of Massachusetts by an individual claiming to be an employee of a CBIZ client whose personally identifiable information (“PII”) was compromised and stolen during a cyberattack CBIZ experienced on or about May 31, 2023. As a result of this incident, hackers were able to access and download certain files from CBIZ’s MOVEit Transfer server. The lawsuit alleges that CBIZ and Progress Software Corporation, the owner of MOVEit Transfer, failed to adequately secure and safeguard the individual’s, and similarly situated employees of CBIZ’s clients, PII from unauthorized access. The lawsuit seeks various remedies, including actual, compensatory, and punitive damages, along with injunctive relief, costs, and attorneys’ fees. On December 8, 2023, CBIZ was named as a defendant in a second putative class action lawsuit in the United States District Court for the District of Massachusetts by an individual making similar claims and seeking similar remedies as in the first lawsuit regarding the cyberattack CBIZ experienced on or about May 31, 2023. Both cases were transferred into a multidistrict litigation, styled as In Re: MOVEit Customer Data Security Breach Litigation, pending in the United States District Court for the District of Massachusetts (the “MDL”). To date, the MDL has over 180 cases against over 100 different defendants, all with claims arising out of the cyberbreach by hackers of Progress Software Corporation’s MOVEit Transfer 13 software. The cases in the MDL, including the cases against CBIZ, are in their earliest stages, with a stay in place until the MDL Court issues a scheduling order. Due to the early stage of litigation, the Company is not able to determine or predict the ultimate outcome of these lawsuits nor reasonably provide an estimate or range of the possible outcome or losses, if any. In June of 2025, the Company settled litigation against a small group of former employees. As part of the settlement of that litigation, the Company received a settlement payment of $ 12.5 million, which was recorded as a pre-tax gain in “Other income, net” on the consolidated statements of comprehensive income for the three and six months ended June 30, 2025. In addition to the items disclosed above, the Company is, from time to time, subject to claims and lawsuits arising in the ordinary course of business. We cannot predict the outcome of all such matters or estimate the possible loss, if any. Although the proceedings are subject to uncertainties in the litigation process and the ultimate disposition of these proceedings is not presently determinable, we intend to vigorously defend these matters. Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the Company's commitments and contingencies. NOTE 7. FINANCIAL INSTRUMENTS Available-For-Sale Debt Securities - In connection with certain services provided by our payroll operations, we collect funds from our clients’ accounts in advance of paying client obligations. These funds held for clients are segregated and invested in accordance with our investment policy, which requires all investments carry an investment grade rating at the time of initial investment. These investments, primarily consisting of corporate and municipal bonds, are classified as available-for-sale and are included in the “Funds held for clients” line item on the accompanying unaudited Condensed Consolidated Balance Sheets. The par value of these investments totaled $ 39.0 million and $ 41.3 million at June 30, 2025 and December 31, 2024, respectively, and these investments have maturity or callable dates ranging from July 2025 through February 2028. At June 30, 2025, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value. The bond issuers continue to make timely principal and interest payments. The following table summarizes activities related to these investments for the six months ended June 30, 2025 and the year ended December 31, 2024 (in thousands): Six Months Ended June 30, 2025 Year Ended December 31, 2024 Fair value at beginning of period $ 40,999 $ 39,459 Purchases 19,350 23,210 Redemptions ( 3,525 ) ( 500 ) Maturities ( 18,120 ) ( 21,423 ) Change in bond premium 33 ( 386 ) Fair market value adjustment 174 639 Fair value at end of period $ 38,911 $ 40,999 In addition to the available-for-sale debt securities discussed above, we also held other depository assets in the amount of $ 2.4 million and $ 0.2 million at June 30, 2025 and December 31, 2024, respectively. Those depository assets are classified as Level 1 in the fair value hierarchy. Interest Rate Swaps - We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2024 Credit Facilities, or the forecasted acquisition of such liability. We do not purchase or hold any derivative instruments for trading or speculative purposes. Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on our interest rate swaps. The following table summarizes our outstanding interest rate swaps and their classification in the accompanying unaudited Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024 (amounts in thousands): 14 June 30, 2025 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 1,027 Other non-current asset Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 399 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ ( 198 ) Other non-current liability Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 864 ) Other non-current liability Interest rate swap $ 50,000 3.703 % 3/14/2030 $ ( 702 ) Other non-current liability Interest rate swap $ 50,000 3.503 % 4/14/2030 $ ( 285 ) Other non-current liability Interest rate swap (1) $ 50,000 3.680 % 7/14/2030 $ ( 636 ) Other non-current liability Interest rate swap (1) $ 50,000 3.680 % 7/15/2030 $ ( 681 ) Other non-current liability (1) Entered into during the second quarter of 2025. December 31, 2024 Notional Amount Fixed Rate Expiration Fair Value Balance Sheet Location Interest rate swap $ 50,000 0.834 % 4/14/2025 $ 495 Other current asset Interest rate swap $ 30,000 1.186 % 12/14/2026 $ 1,604 Other non-current asset Interest rate swap $ 20,000 2.450 % 8/14/2027 $ 776 Other non-current asset Interest rate swap $ 25,000 3.669 % 4/14/2028 $ 243 Other non-current asset Interest rate swap $ 25,000 4.488 % 10/14/2028 $ ( 437 ) Other non-current liability Refer to Note 8, Fair Value Measurements, for additional disclosures regarding fair value measurements. The following table summarizes the effects of the interest rate swaps on the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024 (in thousands): Gain (Loss) Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Three Months Ended June 30, Three Months Ended June 30, 2025 2024 2025 2024 Interest rate swaps $ ( 1,719 ) $ 587 $ 594 $ 1,174 Gain (Loss) Recognized in AOCI, net of tax Gain Reclassified from AOCI into Expense Six months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Interest rate swaps $ ( 2,436 ) $ 2,441 $ 1,373 $ 2,365 15 NOTE 8. FAIR VALUE MEASUREMENTS The following table summarizes our assets and (liabilities) at June 30, 2025 and December 31, 2024, respectively, that are measured at fair value on a recurring basis subsequent to initial recognition and indicates the fair value hierarchy of the valuation techniques utilized by us to determine such fair value (in thousands): Level June 30, 2025 December 31, 2024 Assets of deferred compensation plan 1 $ 177,150 $ 167,170 Available-for-sale debt securities 1 $ 38,911 $ 40,999 Other depository assets 1 $ 2,428 $ 176 Deferred compensation plan obligations 1 $ ( 177,150 ) $ ( 167,170 ) Interest rate swaps 2 $ ( 1,940 ) $ 2,681 Bank debt 2 $ ( 1,554,489 ) $ ( 1,399,932 ) Contingent purchase price liabilities 3 $ ( 48,733 ) $ ( 96,967 ) During the six months ended June 30, 2025 and 2024, there were no transfers between the valuation hierarchy Levels 1, 2 and 3. The following table summarizes the change in Level 3 fair values of our contingent purchase price liabilities for the six months ended June 30, 2025 and 2024 (pre-tax basis, in thousands): 2025 2024 Beginning balance – December 31 $ ( 96,967 ) $ ( 114,946 ) Additions from business acquisitions ( 2,941 ) ( 15,184 ) Settlement of contingent purchase price liabilities 52,662 46,929 Change in fair value of contingencies 170 423 Change in net present value of contingencies ( 1,657 ) ( 1,061 ) Ending balance – June 30 $ ( 48,733 ) $ ( 83,839 ) The following table summarizes the changes in contingent purchase price consideration for previous acquisitions and contingent payments made for previous business acquisitions in the three and six months ended June 30, 2025 and 2024, respectively (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net expense $ 1,020 $ 204 $ 1,487 $ 638 Cash settlement paid $ 19,245 $ 9,898 $ 48,764 $ 40,855 Shares issued (number) 14 34 47 94 Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the fair value measurements and classification of our financial assets and liabilities. 16 NOTE 9. OTHER COMPREHENSIVE INCOME The following table is a summary of other comprehensive income and discloses the tax impact of each component of other comprehensive (loss) income for the three and six months ended June 30, 2025 and 2024 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net unrealized gain on available-for-sale securities, net of taxes (1) $ 51 $ 167 $ 123 $ 223 Net unrealized (loss) gain on interest rate swaps, net of taxes (2) ( 2,164 ) ( 292 ) ( 3,465 ) 668 Foreign currency translation ( 2 ) ( 17 ) ( 8 ) ( 15 ) Total other comprehensive (loss) income, net of tax $ ( 2,115 ) $ ( 142 ) $ ( 3,350 ) $ 876 (1) Net of income tax expense of $ 22 and $ 68 for the three months ended June 30, 2025 and 2024, respectively. Net of income tax expense of $ 51 and $ 89 for the six months ended June 30, 2025 and 2024, respectively. (2) Net of income tax benefit of $ 722 and $ 99 for the three months ended June 30, 2025 and 2024, respectively. Net of income tax benefit of $ 1,156 and income tax expense of $ 223 for the six months ended June 30, 2025 and 2024, respectively. NOTE 10. COMMON STOCK Common Stock Issued for the Transaction - Pursuant to the Agreement and Plan of Merger, dated as of July 30, 2024, by and among the Company, Marcum and the other parties thereto (the “Merger Agreement”) and as part of the total purchase price consideration we issued shares to the selling shareholders in the Transaction. Refer to Note 3, Business Combinations, for more detail. Right of First Refusal Program - Pursuant to the Merger Agreement, the Company and selling shareholders entered into a Right of First Refusal Agreement (the “ROFR Agreement”). Under the ROFR Agreement, the selling shareholders granted the Company a right of first refusal to repurchase all or any portion of our common stock issued to the selling shareholders pursuant to the Merger Agreement. The Company holds the right of first refusal until November 1, 2028. Share Repurchase Program - Over the past twenty years , our Board of Directors has annually renewed the Company’s share repurchase program, which permits the Company to repurchase, in accordance with SEC rules, up to 5 million shares of our outstanding common stock (i) in the open market, (ii) in privately negotiated transactions, or (iii) under Rule 10b5-1 trading plans (the “Share Repurchase Program”). The Board of Directors authorized the Share Repurchase Program on February 7, 2024, permitting repurchases through March 31, 2025, and February 11, 2025, permitting repurchases through March 31, 2026. Privately negotiated transactions may include repurchases from employees, officers and directors and repurchases from former partners of Marcum pursuant to the ROFR Agreement, as discussed above. Refer to Note 14, Common Stock, to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for more detail about the Share Repurchase Program. We repurchased 1.0 million shares of our common stock at of $ 71.3 million under the ROFR Agreement during the six months ended June 30, 2025. Additionally, to settle statutory employee withholding related to vesting of stock awards, we repurchased 0.1 million shares of our common stock at cost of $ 7.8 million during the six months ended June 30, 2025 and 0.2 million shares at a cost of $ 11.2 million during the six months ended June 30, 2024. 17 NOTE 11. EMPLOYEE STOCK PLANS On May 10, 2023, the shareholders of the Company approved an amendment to the 2019 Stock Omnibus Incentive Plan (the “2019 Plan”). The amendment added 1.5 million shares to the total number of shares that may be issued under the 2019 Plan. All other aspects of the 2019 Plan remain unchanged. The 2019 Plan, which expires in 2029, permits the grant of various forms of stock-based awards. A maximum of 4.6 million stock options, restricted stock or other stock-based compensation awards may be granted. The terms and vesting schedules for the stock-based awards vary by type and date of grant. Shares subject to award under the 2019 Plan may be either authorized but unissued shares of our common stock or treasury shares. Refer to Note 15, Employee Stock Plans to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the 2019 Plan. Compensation expense for stock-based awards recognized during the three and six months ended June 30, 2025 and 2024 was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Restricted stock units and awards $ 5,289 $ 1,552 $ 10,148 $ 2,903 Performance share units 1,311 826 2,091 2,113 Total stock-based compensation expense $ 6,600 $ 2,378 $ 12,239 $ 5,016 Stock Options and Restricted Stock Units and Awards – The Company did no t grant any stock options, no r were any stock options exercised during the six months ended June 30, 2025. As of June 30, 2025, we have 150 thousand stock options outstanding with a weighted average exercise price per share of $ 35.22 . The following table presents our restricted stock units and awards activity during the six months ended June 30, 2025 (in thousands, except per share unit data): Restricted Stock Units and Awards Number of Shares Weighted Average Grant-Date Fair Value (1) Outstanding at beginning of year 899 $ 67.01 Granted 130 $ 80.55 Exercised or released ( 99 ) $ 52.41 Expired or canceled ( 8 ) $ 80.59 Outstanding at June 30, 2025 922 $ 70.37 (1) Represents weighted average market value of the shares; awards are granted at no cost to the recipients. Performance Share Units (“PSUs”) – PSUs are earned based on our financial performance over a contractual term of three years and the associated expense is recognized over that period based on the fair value of the award. A three-year cliff vesting schedule of the PSUs is dependent upon the Company’s performance relative to pre-established goals based on an earnings per share target (weighted 70 %) and total growth in revenue (weighted 30 %). The fair value of PSUs is calculated using the market value of a share of our common stock on the date of grant. For performance achieved above specified levels, the recipient may earn additional shares of stock, not to exceed 200 % of the number of PSUs initially granted. For the PSUs granted in 2025, the recipients may earn additional shares of stock, not to exceed 300 % of the number of PSUs initially granted if performance achieved above specified levels. 18 The following table presents our PSUs activity during the six months ended June 30, 2025 (in thousands, except per share unit data): Performance Share Units Weighted Average Grant-Date Fair Value Per Unit (1) Outstanding at beginning of year 285 $ 48.18 Granted 81 $ 84.67 Vested ( 124 ) $ 38.12 Adjustments for performance results ( 3 ) $ 38.12 Outstanding at June 30, 2025 239 $ 65.80 (1) Represents weighted average market value of the PSUs; PSUs are granted at no cost to the recipients. NOTE 12. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Numerator: Net Income $ 41,942 $ 19,793 $ 164,715 $ 96,677 Denominator: Basic Weighted average common shares outstanding (1) 63,542 50,111 63,692 50,079 Diluted Stock options (2) 77 80 81 77 Restricted stock units and awards (2) 165 73 187 80 Contingent shares (3) — 12 — 12 Diluted weighted average common shares outstanding (4) 63,784 50,276 63,960 50,248 Basic earnings per share $ 0.66 $ 0.39 $ 2.59 $ 1.93 Diluted earnings per share $ 0.66 $ 0.39 $ 2.58 $ 1.92 (1) A total of 13.6 million shares that were issued as consideration in connection with the Transaction are included for the three and six months ended June 30, 2025. Refer to Note 3, Business Combinations for more detail. (2) A total of 63 thousand and 79 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2025, as their effect would be anti-dilutive. A total of 9 thousand and 96 thousand shares of stock-based awards were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2024,as their effect would be anti-dilutive. (3) Contingent shares represent additional shares to be issued for purchase price earned by former owners of businesses acquired by us once future conditions have been met. (4) The denominator used in calculating diluted earnings per share did not include 239 thousand and 254 thousand PSUs for both the three and six months ended June 30, 2025, and 2024, respectively. The performance conditions associated with these PSUs were not met and consequently none of these PSUs were considered as issuable for the three and six months ended June 30, 2025 and 2024. 19 NOTE 13. SEGMENT DISCLOSURES Our business units have been aggregated into three practice groups: Financial Services, Benefits and Insurance Services, and National Practices. The business units have been aggregated based on the following factors: similarity of the products and services provided to clients; similarity of the regulatory environment in which they operate; and similarity of economic conditions affecting long-term performance. The business units are managed along these segment lines. Refer to the Annual Report on Form 10-K for the year ended December 31, 2024 for further discussion on the segment lines. Corporate and Other - Included in Corporate and Other are operating expenses that are not directly allocated to the individual business units. These expenses primarily consist of certain health care costs, gains or losses attributable to assets held in our non-qualified deferred compensation plan, stock-based compensation, consolidation and integration charges, certain professional fees, certain advertising costs, and other various expenses. Accounting policies of the practice groups are the same as those described in Note 1, Basis of Presentation and Significant Accounting Policies, to the Annual Report on Form 10-K for the year ended December 31, 2024. Upon consolidation, intercompany accounts and transactions are eliminated, thus inter-segment revenue is not included in the measure of profit or loss for the practice groups. Performance of the practice groups is evaluated on income (loss) before income tax expense (benefit) excluding those costs listed above, which are reported in “Corporate and Other”. The practice groups respective revenue and pre-tax income, significant segment expenses, and a reconciliation of segment profit or loss measure to the consolidated income before income tax expense for the three and six months ended June 30, 2025 and 2024 is presented below. We do not manage our assets on a segment basis, therefore segment assets are not presented below. Segment information for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands): Three months ended June 30, 2025 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 569,819 $ 101,929 $ 11,748 $ 683,496 Significant expenses: Personnel costs 378,268 65,078 10,357 453,703 Facility costs 23,636 3,195 3 26,834 Other costs, gains, and losses, net (1) 82,580 15,688 121 98,389 Total segment expense 484,484 83,961 10,481 578,926 Segment income before income tax expense 85,335 17,968 1,267 104,570 Corporate & other: Unallocated corporate operating expenses 16,638 General & administrative expenses 27,637 Interest expense 27,867 Other income, net ( 25,351 ) Consolidated income before income tax expense $ 57,779 20 Three Months Ended June 30, 2024 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 309,233 $ 97,419 $ 13,360 $ 420,012 Significant expenses: Personnel costs 212,988 65,435 11,421 289,844 Facility costs 11,510 3,062 62 14,634 Other costs, gains, and losses, net (1) 38,183 14,703 549 53,435 Total segment expense 262,681 83,200 12,032 357,913 Segment income before income tax expense 46,552 14,219 1,328 62,099 Corporate & other: Unallocated corporate operating expenses 8,288 General & administrative expenses 22,050 Interest expense 5,884 Other income, net ( 2,316 ) Consolidated income before income tax expense $ 28,193 21 Six months ended June 30, 2025 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 1,283,480 $ 214,905 $ 23,125 $ 1,521,510 Significant expenses: Personnel costs 789,570 131,743 20,512 941,825 Facility costs 47,346 6,403 5 53,754 Other costs, gains, and losses, net (1) 157,876 30,846 229 188,951 Total segment expense 994,792 168,992 20,746 1,184,530 Segment income before income tax expense 288,688 45,913 2,379 336,980 Corporate & other: Unallocated corporate operating expenses 20,435 General & administrative expenses 55,707 Interest expense 53,023 Other income, net ( 22,874 ) Consolidated income before income tax expense $ 230,689 Six Months Ended June 30, 2024 Financial Services Benefits and Insurance Services National Practices Total Revenue from external customers $ 681,863 $ 205,827 $ 26,619 $ 914,309 Significant expenses: Personnel costs 429,603 131,158 22,843 583,604 Facility costs 23,845 6,244 125 30,214 Other costs, gains, and losses, net (1) 74,708 29,391 997 105,096 Total segment expense 528,156 166,793 23,965 718,914 Segment income before income tax expense 153,707 39,034 2,654 195,395 Corporate & other: Unallocated corporate operating expenses 23,642 General & administrative expenses 40,761 Interest expense 10,395 Other income, net ( 11,610 ) Consolidated income before income tax expense $ 132,207 (1) Other costs, gains, and losses, net primarily consist of travel and entertainment costs, computer and technology related costs, depreciation and amortization expenses, and other discretionary costs. NOTE 14. SUBSEQUENT EVENTS On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system such as permanent extensions of certain expiring provisions of the Tax Cuts and Jobs Act and restoration of favorable tax 22 treatment for certain business provisions. Certain provisions are effective for us beginning in 2025. We are currently assessing its impact on our consolidated financial statements. On July 9, 2025, we entered into an 18-month interest rate swap with a notional value of $ 100 million and a fixed rate of 3.85 %. The interest rate swap expires on January 14, 2027. On July 15, 2025, we entered into a 1-year interest rate swap with a notional value of $ 100 million and a fixed rate of 4.047 %. The interest rate swap expires on July 14, 2026. Subsequent to June 30, 2025 and up to July 25, we repurchase approximately 0.3 million shares of our common stock under the ROFR Agreement at a total cost of approximately $ 25.3 million.